Annual report 2017

CEO statement

It is a privilege and an honor to join a company that over the last couple of years, has step by step created an exciting platform within IgG-modulating enzymes for transplantation and acute autoimmune diseases. The team at Hansa Medical has successfully designed and carried out a series of clinical studies with its lead compound IdeS, and at the same time created a strong pipeline in a drug based on IdeS.

Chairman statement

2017 was a successful year for Hansa Medical, during which we reached several important milestones with our clinical studies and broadened our long-term investor base to include specialist international healthcare funds. We also gained increased attention from the medical research community following the publication of clinical IdeS data in The New England Journal of Medicine.

January–December 2017 Business Highlights

Publication of clinical data in The New England Journal of Medicine

Combined data from three independent clinical Phase II studies with Hansa Medical’s lead candidate IdeS was published in The New England Journal of Medicine 2017;377:442-53, August 3, 2017 issue. The published results demonstrate that treatment with IdeS is effective in reducing donor-specific antibodies (DSAs) to levels allowing lifesaving kidney transplantation of highly sensitized patients.

Raised SEK 545 million and broadened the investor base

Hansa Medical successfully raised SEK 545 million (USD 65 million), gross, through a directed share issue to a number of US, UK and Swedish specialist healthcare investors. The proceeds will enable the timely completion of ongoing clinical studies with IdeS evaluating the efficacy of this drug candidate to enable kidney transplantation in highly sensitized patients. The proceeds are also being used to expand the company’s commercial and medical affairs’ capabilities. Hansa Medical will also carry out several clinical studies in related transplant indications and in selected acute autoimmune diseases.

Access to PRIME granted by EMA

The European Medicines Agency (EMA) granted Hansa Medical access to its Priority Medicines (PRIME) scheme for IdeS in enabling kidney transplantation for highly sensitized patients. PRIME is a scheme launched by the EMA to enhance support for the development of medicines that target an unmet medical need.

Continued patient enrollment in Phase II study with IdeS in anti-GBM

Continued patient enrollment in the investigator-initiated Phase II study with IdeS in anti-GBM. The study began in June 2017, and as of March 21, seven patients have been recruited and treated with IdeS. Limited follow-up data is currently available from five of these seven patients who have all responded favorably and IdeS appears to be well tolerated. Patients enrolled in the study will be monitored for six months.

Ulf Wiinberg served as Acting CEO November 9, 2017 to March 20, 2018

Ulf Wiinberg, the company’s Non-Executive chairman, was appointed Acting CEO, following the tragic and unexpected death of the company’s CEO, Göran Arvidson. Board member Birgit Stattin Norinder was appointed chairman.

Significant events after the end of the reporting period

Søren Tulstrup appointed new President and CEO

Søren Tulstrup appointed new President and CEO of Hansa Medical effective March 20, 2018. Hansa Medical’s acting CEO Ulf Wiinberg reverts to his former role as Chairman of Hansa Medical and Birgit Stattin Norinder reverts to her former role as member of the board of directors. Søren Tulstrup has a broad and extensive background as senior executive in the global biopharma industry. Recently, he served as CEO of Vifor Pharma AG (VTX:VIFN), a Swiss-based global pharmaceutical company with a market-leading position within chronic kidney disease, annual sales of approximately USD 1 billion and 2,000 employees.

Completed enrollment in Highdes study

Completed enrollment in Hansa Medical’s international multicenter Phase II study Highdes. The primary objective of the study – to turn a positive crossmatch test into a negative and thereby enable kidney transplantation - was accomplished in all 18 treated patients. All patients will be monitored for six months.

Finalized enrollment in US investigator-initiated Phase II study

Finalized enrollment in US investigator-initiated Phase II study with IdeS in highly sensitized patients. IdeS effectively reduced the level of DSAs in all 17 treated patients and turned the crossmatch tests from positive to negative, thereby enabling transplantation for all patients. All patients will be followed for six months to monitor safety, kidney function and DSA levels.

US orphan drug designation for IdeS in Guillain-Barré syndrome

The FDA granted orphan drug designation to IdeS (INN: imlifidase) for the treatment of Guillain-Barrés syndrome. The FDA Orphan Drug Act (ODA) provides for granting special status to a drug or biological product to treat a rare disease that affect fewer than 200,000 people in the US. Orphan drug designation qualifies the sponsor of the drug for various development incentives of the ODA, including tax credits, protocol assistance and up to seven years of orphan drug exclusivity.

Vision and Strategy

Our vision is to help improve the care of patients with severe immunological conditions by taking novel and innovative pharmaceuticals to market.

IdeS can potentially be used in several different transplant-related indications and acute autoimmune conditions in which IgG antibodies are proven, or suspected, to play a significant role for disease progression. In addition, IdeS has the potential to effectively inactivate anti-drug antibodies developed against biological drugs and gene therapies. Hansa Medical’s long-term vision is to make IdeS and Novel immunoglobulin cleaving enzymes for Repeat dosing (NiceR) available for as many of these IgG-mediated conditions as possible.

Our strategy

We are focused on the research, development and commercialization of novel immunomodulatory enzymes that eliminate harmful IgG antibodies from the body and have the potential to transform the lives of people in significant need of an organ transplant or patients with autoimmune conditions.

Our initial clinical focus is on IdeS, a single dose treatment of acute IgG-mediated conditions. In parallel, we are also developing novel IgG-inactivating drug candidates for repeat dosing under the project name NiceR, which may translate to wider usage as an IgG-removing agent.

Our short term strategic priorities are:

To quickly attain market approval for lead candidate IdeS as pre-treatment of sensitized patients prior to kidney transplantation, and start building a commercial infrastructure

To expand knowledge and awareness of the potential of lead candidate IdeS in additional transplant and autoimmune indications

To follow up with clinical studies in additional indications with significant unmet medical need where IdeS has apparent potential to effectively treat, or prevent, IgG-mediated pathophysiology

Hansa Medical’s lead drug candidate IdeS

IdeS – a novel therapeutic principle
Immunoglobulin G-degrading enzyme of Streptococcus pyogenes (IdeS, INN: imlifidase) is an enzyme that specifically cleaves immunoglobulin G (IgG). Our strategy takes advantage of the ability of IdeS to specifically and efficiently inactivate IgG, to prevent and treat patients who have developed pathogenic IgG. IdeS-mediated IgG elimination constitutes a novel therapeutic principle for the treatment of IgG-mediated human diseases. Our clinical studies are initially focused on desensitization of HLA-immunized patients prior to kidney transplantation, also referred to as sensitized patients. Our long-term vision is that IdeS will become the treatment of choice in several acute IgG-mediated conditions within autoimmunity and transplantation.

Introduction to Hansa Medical development programs

IdeS is an enzyme, currently in late stage clinical development, that specifically cleaves immunoglobulin G (IgG). Our strategy takes advantage of the ability of IdeS to specifically and efficiently inactivate IgG to prevent and treat patients who have developed pathogenic IgG. IdeS-mediated IgG elimination constitutes a novel therapeutic principle for the treatment of IgG-mediated acute human diseases.

NiceR (Novel immunoglobulin cleaving enzymes for Repeat dosing) is a preclinical research and development program under which IgG-cleaving enzymes with novel properties are developed. The aim of the development is to create novel IgG-inactivating drugs that can be used for repeated dosing in autoimmune conditions, oncology and transplantation where patients benefit from more than one dose of an IgG-modulating enzyme. The development program is currently in the lead optimization phase with the intention to select a lead candidate suitable for clinical development.

EnzE (Enzyme-based antibody Enhancement) is a preclinical research and development program under which the combination use of approved antibody based cancer treatments with IgG-modulating enzymes is examined. Recent findings demonstrate that pre-treatment with IgG-degrading or modulating enzymes has the potential to potentiate presently available antibody-based cancer therapies.

HBP-assay (serum quantification of Heparin-Binding Protein) is a novel diagnostic method developed by Hansa Medical to help predict severe sepsis in patients with infectious disease symptoms. Early prediction and treatment of risk patients is key to prevent death from severe sepsis. A first version of HBP-assay has been launched on the European market and has been evaluated in two finalized clinical studies in approximately 1,000 patients demonstrating superior performance in predicting severe sepsis. HBP-assay has been out-licensed to Axis-Shield Diagnostics who is now running additional clinical trials in Europe, the US and China, and the agreement includes rights to royalties from Axis-Shield to Hansa Medical.

Pipeline

Shareholder information

Market capitalization (Dec. 31, 2017)

SEK 0 m

Number of shares

0

(37,807,386 A-shares and 401,000 C-shares)

Ticker

HMED

ISIN

SE0002148817

Share capital

Total shares outstanding as of 31 December 2017 amounted to 38,208,386 (37,807,386 A-shares and 401,000 C-shares). At year end the share capital amounted to SEK 38,208,386. At the general meeting, each share entitles the holder to one vote and each shareholder may vote the full number of shares held by him or her. All outstanding shares are fully paid up.

The company’s share capital is denominated in Swedish kronor (SEK) and divided amongst the company’s outstanding shares with a quotient value of SEK 1 per share.

HMED share price and trading volume January 1, 2013 to March 15, 2018

15 largest shareholders, December 31, 2017

Number of shares

Owners

HMED

HMED C

Capital (%)%

Nexttobe AB

9,443,761

0

24.7

AFA Försäkring

1,825,959

0

4.8

Thomas Olausson (private and via company)

1,548,569

0

4.1

Avanza Pension

1,346,278

0

3.5

Handelsbanken Fonder

1,305,157

0

3.4

Gladiator

1,168,530

0

3.1

Oppenheimer

1,103,232

0

2.9

Polar Capital

609,589

0

1.6

BWG Invest Sàrl

600,370

0

1.6

Tredje AP-fonden

572,594

0

1.5

Sven Sandberg

539,700

0

1.4

Catella Fonder

488,280

0

1.3

C WorldWide Asset Management

440,541

0

1.2

Invesco

412,085

0

1.1

Hansa Medical AB

0

401,000

1.0

Others

16,402,741

0

42.8

Total

37,807,386

401,000

100.0

Turnover of the HMED share at Nasdaq Stockholm 2013 to 2017

MSEK

Financial summary for the group

1 January – 31 December 2017

KSEK, unless other stated

2017

2016

Profit/loss

Net revenue

3,442

2,579

Operating profit/loss

-176,083

-111,135

Net profit/loss

-176,660

-111,129

Per share data

Earnings/loss per share before and after dilution (SEK)

-4.97

-3.37

Shareholders' equity per share (SEK)

16.68

8.09

Other information

Shareholders' equity

630,661

283,693

Equity ratio (%)

93

91

Cash flow from operating activities

-150,105

-94,563

Cash and cash equivalents including short term investments

616,061

253,578

Number of employees end of the year

33

27

About Hansa Medical

Hansa Medical is a biopharmaceutical company focused on immunomodulatory enzymes for treatment and prevention of rare and severe autoimmune conditions and transplant rejection.